Friday, July 5, 2013

Toasting Abysmal Leadership

David Rubenstein, the co-founder of the powerful Washington
investment firm the Carlyle Group, noted that sequestration – designed
to be terrible – has not increased Congress's desire to pass a real
budget. In fact, it's done the opposite:

"The deficit is down to $350bn [from more than $1tn], so the ardor to do anything has completely gone."

Why do politicians need ardor to lead? Passing a series of budget bills is their job, which they've long abdicated into an omnibus spending bill. When that got too hard they lowered the bar to sequestration. It seems Congress can only do things by passing bills with automatic triggers.

There is no leadership anymore. The front stage has the Red and Blue party at odds over nearly everything. The back stage has the Reds and Blues catering to the David Rubenstein's of the world, a form of greedership.

The White House postponed PPACA's employer requirement until 2015. This helps corporate chiefs and their private equity underwriter (PEU) owners. Ironically Carlyle officials dined with their White House counterparts a number of times recently.

PEU Rubenstein visited Congress numerous times to maintain preferred tax rates via carried interest. The Carlyle Group likes trading companies that do business with Uncle Sam. They've dumped pensions in a number of takeovers.

How far does private equity greed reach? I wonder how many PEU billionaires over age 65 are on Medicare...

Insider Architect of the Implosion

"I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule: They don’t criticize other insiders."--Larry Summers, Ph.D.

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When Tim Geithner, the former Treasury secretary, takes over as president of Warburg Pincus, the private-equity firm, even a high-school dropout can discern a pattern.-Another person who noticed